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Bloomberg reports cyber-terror bank bailout likely

September 3, 2014

Sept. 3, 2014 – Bloomberg warned of the possibility of another taxpayer-funded bailout of banks in the increasingly likely event of a financial crisis caused by cyber-terrorism.

“Even if customers don’t lose money from a hacking assault on JPMorgan Chase & Co., the episode is a reminder that banks with the most sophisticated defenses are vulnerable,” the paper wrote. “Treasury Department officials have quietly told bank insurers that in the event of a cataclysmic attack, they would activate a government backstop that doesn’t explicitly cover electronic intrusions, two people briefed on the talks said.”

The FBI is reportedly looking into a potential data security breach at JPMorgan Chase and as many as four other banks; the extent of the attacks is not yet clear, but sources say the attack was a “significant foray” into the bank’s system, according to the Wall Street Journal.

KrebsOnSecurity on Tuesday reported a “massive” credit card breach at Home Depot. Data security breaches were also recently announced at Dairy Queen, UPS, and the grocery chain owner Supervalu.

Target announced last month that the massive data breach it experienced last year had cost the company $148 million. NAFCU calculated that card issuers, including credit unions, spent $480 million in card replacement and other costs due to the Target breach.

NAFCU was the first financial trade association to call for a national data security standard for retailers in the wake of the massive Target data breach last year, and continues to push for legislative action on Capitol Hill.